Posts by John

John Griffin

The new Pensions SORP which provides guidance for producing pension scheme accounts was launched on 25 November 2014 following the publication of FRS 102. The Pensions SORP needs to be taken into account for accounting periods starting from 1 January 2015.

The key new requirements include:

• Disclosure of investment risks and the associated risk management practices
• Disclosure of approach to valuing investments
• Valuation of annuities (previously excluded from the accounts)
• Cost analysis of transaction types Read more »

John Griffin

At the beginning of this year, Pensions Minister Steve Webb called for pensioners to be given the power to switch annuity providers, in much the same way as mortgages can be switched.  At the time, insurers protested that this was an unfair comparison, that annuities were much more complicated than mortgages.  Well, they would say that, wouldn’t they?

Annuity providers had been rightly criticised, for confusing, less than transparent, products, and for charging unnecessarily high commissions.
Regulators have criticised the sale of these contracts, describing the market as not fit for purpose. In a report last month, the Financial Conduct Authority warned that middle-class savers were being left thousands of pounds out of pocket after being sold poor value or inappropriate contracts which, once signed, could not be changed.

Fast-forward less than three months, and Chancellor George Osborne has announced that savers will be able to withdraw their entire pension pot in cash from 2015.  I did suspect that Steve Webb’s earlier announcement was only just a hint of what was to come.

Read more »

John Griffin

The glass half-full/half-empty idiom came to mind last week after The Pensions Advisory Service published its Women and Pensions report; the report had some surprising revelations:

74% of the 1,000 women surveyed did not know how much they would get from the State in retirement;
36% did not know when their State pension would be paid; and
57% did not know if there was a shortfall in their National Insurance record.

These figures are nothing short of astonishing.  I’m amazed that, given the seemingly never-ending adjustments/simplification/upheaval/tweaking of pensions, that:

26% DO know what they’ll get from the State;
64% (really?) DO know when it will be paid; and
as many as 43% DO know enough about their NI record to know if there is a shortfall.

Pension issues can be more complicated for women, as they are more likely to have a career break, or work part-time, and so have an incomplete State pension, so these figures are doubly-encouraging.

So maybe there is light at the end of the dark pensions tunnel, and it’s not just the remnants of my cheery, New Year optimism.

As for the “glass” question, it’s not nearly as important as whose round it is.

John Griffin

Spence & Partners latest blog for Pension Funds Online –

There was a welcome intervention into the murky world of pensions last week, from a source that will be a surprise to many.

It could be that he’s about to reach age 65 and so is worried about his retirement income, or that he’s concerned about being whacked by the bedroom-tax on Clarence House, or that he’s now a grandpa. But whatever the motivation, Prince Charles spoke out – demonstrating his knowledge and understanding of some of our current pensions problems.

On the same day teachers in England and Wales were staging another strike in protest at proposed changes to their contracts, including their pension arrangements.

The apparent contrast in attitudes was, to me, striking. The often-maligned, out of touch Royal was talking much sense about the predicament in which the pensions industry finds itself, calling for some long-term thinking and for some reality checks on the challenges that face his mum’s millions of subjects. However, a reported £3.9m hole in the Duchy of Cornwall accounts may also have grabbed his attention. Read more »

John Griffin

Now that auto-enrolment is a year old, and following publicity featuring high-profile figures like Karren Brady and Theo Paphitis, even the Man On The Moon must be aware that “something” is happening in the pensions world.  So much pensions news seems negative these days, with those in the pensions business now regarded by the general public as being as reputable as lawyers or politicians but, for a change, recent news has been more positive.

The figures appear impressive: 1.6 million more savers are in workplace pensions; less than 10% of employees have chosen to opt out (initial estimates had this at 30%).  But we shouldn’t get carried away, according to some pensions “experts” (the usual suspects, the “ It’s The End Of The World As We Know It” naysayers) and it’s true, there is still a long way to go.  Only the biggest companies have started enrolling workers into new workplace pensions since October 2012; medium-sized companies will do so from April 2014, those with fewer than 50 employees in June 2015, with all remaining eligible employees enrolled by2018. 

So what have we learned from the first year?  Read more »

John Griffin

Anyone who is still paying attention to the Scottish independence “debate” may have noticed that it hit a new nadir a few weeks ago, when the UK government suggested that Scottish independence would result in higher mobile phone bills north of the border.

Maybe they had visions of a still-United Kingdom a few decades into the future, when a politically-conscious young Nigel from Auchtermuchty asks his father why his grandad Angus and granny Morag had voted against independence, and is told “Well son, it was a chance that only comes up every few centuries and may never come up again, for the people to change the destiny of this historic land, this land of legends, almost mythical in its haunting beauty, this land of Wallace, of Burns, of The Krankies, but the prospect of paying a few extra pence for mobile phone roaming charges in England was just too much to bear, so we stuck with the Union.  Now, eat up your jellied eels”.

More seriously (but not much more), there are reports of impending doom for UK pensions, should Scotland choose independence, following an ICAS report in April, which was measured and balanced but which appears to have provoked mild hysteria in some quarters. Read more »

John Griffin

Now that the Financial Services Authority (FSA) is no more, it is likely that it will mainly be remembered for one thing: presiding over the near-meltdown of the UK’s banking system.  It didn’t rein in the banks, and arguably even encouraged the explosion in the City in the mid 2000s, with its feather-light touch approach to regulation.  To be fair, though, none of the so-called regulators around the world came out of the crisis (if, indeed, we are out of it) smelling of roses. Read more »

John Griffin

While Daniel Day-Lewis is being lauded for his portrayal of Abraham Lincoln, we should remember that there are other inspirational US presidents worthy of mention – although perhaps not in living memory (sorry Barack, early hopes have faded, if not disappeared).  One such president was Thomas Jefferson, an American ‘founding-father’, and third president.  Read more »

John Griffin

In an earlier posting (“Pension Funds and Executive Pay”), I expressed the hope that institutional investors such as pension funds would wield their collective muscle and not stand idly by while huge multinationals give their senior staff exorbitant pay awards.  For years, major institutions, including pension funds, have effectively boycotted annual shareholder meetings, where the most contentious issues might be the quality of pasties on offer – even before the “pasty tax”. 

With the AGM season almost upon us, we will soon see if the nationwide revulsion at boardroom excesses translates into action where it counts. Read more »

John Griffin

None of the above has had a great press recently.

Take Diane Abbott – if you dare.  Diane was this country’s first black woman MP and has a reputation of being a bit of a maverick – in other words, she often says things worth listening to and doesn’t always toe the party line.  Given that she’s been an MP for almost 25 years it was surprising that she made a bit of a faux pas recently by claiming that “white people” liked to play “divide and rule”.  Read more »

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